Japan to Punish Several Cryptocurrency Exchanges

They plan to slap these institutions by sending across administrative punishment notices, suspended their business. People directly involved in the matter told Reuters on Wednesday.

The same sources also said that the Financial Services Agency plans to order Coincheck Inc – the exchange that was targeted by hackers in a $530 million theft of digital money, to show their support and raise the agency’s standards.

This action would come as a second move since Coincheck hack in late January, it remains to be one the most significant digital money theft, ever. The Coinckeck incident underscored the risk of trading an asset with policymakers across the world are quite shocking, and further drawing attention to Japan’s exchange regulations.

Only last year, Japan became the World’s first country to allow transactions through cryptocurrency by regulating it at a national level. The other 16 exchanges, including Coincheck, were allowed to continue operating while the regulators analyzed their applications.

Post the Coincheck incident; the FSA announced that it would carefully investigate all cryptocurrency exchanges for security flaws and orders the exchanges to file reports on system risk management and currency storage. The sourced also said that the FSA will order a few unregistered exchanges to stop their operations.

The FSA has requested Coincheck to strengthen its security walls and pay more attention to customer protection and the FSA monitoring progress of repaying investors that are affected in the process. The exchange currency promised that it would repay about $425 million of the cryptocurrency that was lost in the hack as it has enough funds to make those payments but declined to specify as to when it would repay the affected investors. The FSA is likely to order two of Japan’s Government registered exchanges, GMO Coin and Zaif to strengthen their business. We will have to wait and see how Coincheck with the help of the FSA will deal with the biggest digital theft till date.

Source: Reuters

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Lakshmi Chirumamilla is an associate editor at StartupWorld. Lakshmi has a deep knowledge about the concept of a Startup and she works with Startup Founders across the globe to help them share their success story on StartupWorld. Prior to becoming an Associate Editor, Lakshmi interned with JWT Mindset and NDTV - national news channel that provides the latest news from India and the world. She spends her free time with a book or a sketchpad.